Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 33 - Part XII - Aggregate Demand and Aggregate Supply - Problems and Applications - Page 742: 1

Answer

Please see the graph.

Work Step by Step

The short-run aggregate supply curve is labeled $AS_{HR}$, and the long-run aggregate supply curve is labeled $AS_{LR}$. The aggregate supply curves and the aggregate demand curve (labeled $AD$) intersect at exactly one place. The point of intersection is at price $P_0$ and output level $Q_0$. The output level is the natural level of output.
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